Reference no: EM133515991

Scenario

You are the owner of a small U.S.-based coffee distributor. You sell not only coffee but also related products such as branded mugs. For the past 3 years, your company's branded coffee mugs have been produced and sold in Norway through a licensing agreement with Norwegian firm Drikke AS through its "Kaffekopp" subsidiary. The Drikke AS CEO, Espen Foldnes, recently visited you and revealed that his firm was about to acquire its leading rival in the Norwegian market, and, as a result, wants to sell its Kaffekopp unit. CEO Foldnes has approached your firm with two proposals.

First, Drikke AS is willing to sell you its Kaffekopp subsidiary outright. This would represent an acquisition for you in the Norwegian market.

Second, suppose the two firms cannot agree on terms for the purchase of Kaffekopp. In that case, Drikke AS is willing to sell its licensing agreement back to you, which will effectively allow you to formulate a new strategy for your company in Norway

1. Explain one advantage of repurchasing your licensing rights in Norway.

2. Explain one disadvantage of repurchasing your licensing rights in Norway.

3. Is repurchasing licensing rights considered a greenfield venture?